ZAGREB, April 19, 2019 – Raiffeisenbank Austria (RBA) analysts expect Croatia to end this year with growth rates similar to those in 2018 and, in their latest analysis, they comment on the restoration of Croatia’s investment credit rating.
For now, Croatia’s investment rating has been restored only by Standard & Poor’s, but the other two rating agencies are expected to follow suit and confirm that, after nearly a decade, Croatia is back among countries with adequate credit quality, the analysis says.
It adds that such assessments will be a consequence of solid fiscal policy indicators, lower external vulnerability, continued economic growth, and preserved political stability.
RBA analysts note that Standard & Poor’s restored Croatia’s investment rating shortly after the European Commission’s decision that Croatia no longer had excessive imbalances.
The strategic commitment to adopting the euro as the sole means of payment certainly also impacted the decision, they say, adding that according to announcements, the government and the central bank will send a letter of intent to Brussels, expressing interest to enter the euro area.
The central part of that envelope would be a list of reform measures to which Croatia would commit in order to make the nominal meeting of economic criteria viable.
The importance of reform measures is reflected in the Commission’s latest report on Croatia, which says the recommended and necessary measures for sustainable and stronger growth are implemented partly and slowly, RBA analysts say.
The poor and slow resolving of internal structural problems can explain why Croatia, despite growth, lags behind comparable member states and why there are no major improvements on competitiveness rankings, they add.
More credit rating news can be found in the Business section.
